Chris Bowen
The Federal Government has asked the Board of Taxation to review the taxation of managed funds as part of a commitment to make Australia more competitive in the export of financial services.
The proposed review was one of a number of measures announced on Friday by Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen, which he said are intended to “make Australia the financial services hub of Asia”.
Bowen told nearly 500 financial service representatives at an Investment and Financial Services Association function in Sydney on Friday that the measures were part of a “Rudd Labor Government commitment to focusing on the export potential of the financial services sector”.
“Directing the board of taxation to review the income tax arrangements applying to managed funds will provide options for introducing a specific tax regime to reduce complexity, increase certainty and minimise compliance costs.
“This will allow the Government to implement reforms to enhance the international competitiveness of Australian managed funds to help ensure the future prosperity of the Australian economy,” he said.
Bowen also announced a consultation paper on interim changes to trading trust rules that apply to real estate investment trusts.
He also revealed that he was in discussions with Trade Minister Simon Crean to provide enhanced support from Austrade to the financial services sector to expand exports.
IFSA chief executive Richard Gilbert welcomed the Assistant Treasurer announcement of a review and the other measures as “vital economic reforms”.
“We have a rate of withholding tax that is well out of alignment with the rest of the world and it is reassuring that the minister recognises we are not seeking special treatment but rather a level playing field”.
“Withholding tax rates currently create a competitive disadvantage and an administrative burden for non-resident investors and are a brake on financial services exports, which studies reveal can add more than $3 billion to our economy.”
